Emerging Market ETFs Suffer $2.1 Bln Outflows, Most Since August

Investors pulled more than $2.1 billion out of U.S. exchange traded funds that invest in emerging markets last week, the most since August. China and Hong Kong led the losses.

Redemptions from ETFs that invest across developing nations as well as those that target specific countries totaled $2.12 billion in the week ended Jan. 15, compared with $566.7 million of losses in the previous week, according to data compiled by Bloomberg. So far in January, investors have withdrawn $2.69 billion.

Stock funds lost $1.89 billion and bond funds declined by $234 million. The MSCI Emerging Markets Index declined 4.2 percent last week.

The biggest change was in China and Hong Kong, where funds shrank by $469.7 million, compared with $22.6 million of redemptions the previous week. Investors withdrew $465.7 million from stock funds and $4 million from bonds.

The Shanghai Composite Index declined 9 percent. The yuan strengthened 0.2 percent against the dollar and implied three-month volatility was 8.1 percent.

Taiwan had the next-biggest change, with ETF investors redeeming $302 million, compared with $164 million of outflows the previous week. All the losses were in stock funds.

The Taiex lost 1.7 percent. The Taiwan dollar depreciated 0.9 percent against the dollar and implied three-month volatility was 8.3 percent.

Following is a table detailing net inflows and outflows for emerging-market ETFs. The data include the index-weighted allocations from the biggest multi-currency funds, such as the Vanguard FTSE Emerging Markets ETF and iShares MSCI Emerging Markets ETF, as well as country-specific funds:

Flow WeekFlow %EquityBondFX
RegionEnd Jan. 15ChangeFlowFlowChange
================================================================================
Total EM Flow-2,119.8274.1%-1,885.9-234.0n/a
China and Hong Kong-469.7n/a-465.7-4.00.15%
Taiwan-302.0-84.12%-302.00.0-0.94%
India-243.6-108.87%-243.70.1-1.43%
South Korea-146.7-97.39%-147.81.1-1.26%
Mexico-133.6-883.90%-120.0-13.6-1.80%
Brazil-121.1n/a-113.5-7.6-0.60%
South Africa-115.0-424.42%-107.7-7.3-2.87%
Russia-79.1-628.37%-69.0-10.0-3.81%
Indonesia-57.5-358.80%-46.9-10.60.09%
Philippines-52.6-468.73%-42.0-10.6-1.21%
Malaysia-51.4-735.33%-45.3-6.0-0.11%
Turkey-42.5-183.00%-31.4-11.1-0.88%
Thailand-35.1-702.07%-35.50.4-0.08%
Poland-33.7-133.99%-25.6-8.1-2.74%
Chile-25.8-153.08%-21.9-3.9-0.47%
Colombia-13.4-719.96%-5.6-7.8-1.05%
Peru-11.1-426.57%-3.8-7.3-0.10%
U.A.E.-11.0n/a-11.20.20.00%
Qatar-9.7-553.16%-9.5-0.20.00%
Argentina-5.2-278.80%1.1-6.33.47%
Egypt-4.3-894.85%-2.8-1.5-0.02%
Vietnam-3.6-169.51%-2.9-0.60.19%
Nigeria-0.7-314.12%-0.80.10.46%
Singapore0.099.84%0.00.00.22%
NOTE1: For further ETF analysis, download the ETF workbook: XLTP XETFM
NOTE2: For Bloomberg’s ETF screener: ETF
NOTE3: Currency performance for China and Hong Kong is based on the yuan,
stock index uses the Shanghai Composite Index.
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